US meat producer Smithfield Foods today (26 August) posted a quarterly loss after its hog unit reported losses of US$38.8m due to higher feed costs.
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Smithfield’s first-quarter losses totalled $12.6m, or $0.09 per share, compared with a profit of $54.6m, or $0.41 per share, for the comparable period of last year.
Results during the three months to 27 July were also hit by a $20.1m loss on commodity hedging contracts and $5.5m in charges related to disposals. Feed costs also ate into the group’s earnings at its Butterball turkey unit and at its international business.
Revenue for the quarter increased slightly, rising to $2.58bn from last year’s $2.23bn.
However, it was not all bad news from the Virginia-based company, with strong exports powering increased profits at its pork processing business, where earnings increased to $61.7m, compared with $26.5m a year ago.
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By GlobalData“Given the overall adverse environment of the industry, I am pleased with the results for the current quarter,” said president and CEO Larry Pope.
“Our fresh pork operations and our packaged meats business performed well in the face of sharply rising input costs. We are continuing to focus closely on our cost structure and improving plant operating efficiencies. Also, our new management structure is in place and moving forward nicely.”
However, looking to the full year, Pope described the future as “uncertain”.
“The volatile nature of both the domestic and world markets for meat prices and grains, combined with uncertainty surrounding the economy and the US dollar, make any prediction of future results very difficult.
“However, we continue to pursue our long-term strategy of emphasising our packaged meats business and improving our fresh meat operations. This strategy is working and is improving the base of our business.”
